Net Income Per Share

9 Months Ended

Jul. 31, 2022

Basic net income per share is computed by dividing net income attributable to common stock by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share is computed by dividing net income attributable to common stock by the weighted-average number of shares of common stock and potentially dilutive shares of common stock outstanding during the period.

Diluted shares outstanding include the dilutive effect of unvested RSUs, in-the-money stock options and employee stock purchase plan rights under the Broadcom Inc. Employee Stock Purchase Plan, as amended (“ESPP”), (collectively referred to as “equity awards”), as well as Mandatory Convertible Preferred Stock, as defined in Note 8. “Stockholders’ Equity.” Potentially dilutive shares whose effect would have been antidilutive are excluded from the computation of diluted net income per share.

The dilutive effect of equity awards is calculated based on the average stock price for each fiscal period, using the treasury stock method. Under the treasury stock method, the amount the employee must pay for exercising stock options and purchasing shares under the ESPP and the amount of compensation cost for future service that we have not yet recognized are collectively assumed to be used to repurchase shares. The dilutive effect of Mandatory Convertible Preferred Stock is calculated using the if-converted method. The if-converted method assumes that these securities were converted at the beginning of the reporting period to the extent that the effect is dilutive.

For each of the fiscal quarter and three fiscal quarters ended August 1, 2021, diluted net income per share excluded the potentially dilutive effect of 12 million shares of common stock issuable upon the conversion of Mandatory Convertible Preferred Stock as their effect was antidilutive.

The following is a reconciliation of the numerators and denominators of the basic and diluted net income per share computations for the periods presented:


	Fiscal Quarter Ended				Three Fiscal Quarters Ended
	July 31, 2022		August 1, 2021		July 31, 2022		August 1, 2021

	(In millions, except per share data)
Numerator - Basic:
Net income	$	3,074	$	1,876	$	8,136	$	4,747
Dividends on preferred stock	(75)		(74)		(224)		(224)
Net income attributable to common stock - basic	$	2,999	$	1,802	$	7,912	$	4,523

Numerator - Diluted:
Net income	$	3,074	$	1,876	$	8,136	$	4,747
Dividends on preferred stock	—		(74)		—		(224)
Net income attributable to common stock - diluted	$	3,074	$	1,802	$	8,136	$	4,523

Denominator:
Weighted-average shares outstanding - basic	405		411		408		409
Dilutive effect of equity awards	13		18		15		20
Dilutive effect of Mandatory Convertible Preferred Stock	12		—		12		—
Weighted-average shares outstanding - diluted	430		429		435		429




Net income per share attributable to common stock:


Basic	$	7.40	$	4.38	$	19.39	$	11.06




Diluted	$	7.15	$	4.20	$	18.70	$	10.54